Ministry of Consumer Affairs, Food & Public Distribution
Meeting held by Department of Food &Public Distribution with States and Industry Associations to implement Scheme to enhance ethanol distillation capacity in the country for producing 1st Generation  ethanol
The Government has fixed a target of 10% blending of fuel grade ethanol with petrol by 2022 and 20% blending by 2025. This has been done with a view to boost agricultural economy, to reduce dependence on imported fossil fuel, to save foreign exchange on account of crude oil import bill and to reduce the air pollution. To meet out the requirement of ethanol, the Government has notified a “Scheme for extending financial assistance to project proponents for enhancement of their ethanol distillation capacity or to set up distilleries for producing 1st Generation  ethanol from feed stocks such sugarcane, rice available with Food Corporation of India, maize etc. vide notification dated 14th January, 2021.
With a view to ensure maximum participation by the entrepreneurs and cooperation by State Governments, a meeting was held through Video Conferencing on 27th January 2021 under the Chairmanship of Secretary, Department of Food & Public Distribution. In the meeting, State Governments, Industry Associations viz ISMA,AIDA,NFCSF, ASSOCHAM,CII etc. and concerned departments of Central Government have apprised about the details of the Scheme, so that the entrepreneurs of their States/Associations can be sensitized to actively participate and avail the benefit of the Scheme.
The State Governments have been requested to promote the scheme to the entrepreneurs of their states and encourage them to participate in the scheme so that the target set by the Government could be achieved well within the timeline. State Governments were also requested to facilitate entrepreneurs in arranging land for the project, to get environment clearance at the earliest and in setting up of distilleries. To facilitate them, State Governments have been requested to nominate nodal department in the States/UTs & nodal officer.
It was also suggested that every State should constitute a Steering Committee under the chairmanship of Chief Secretary and comprising of officers of State Excise Authority, State Pollution Control Board, Industry Department, Industry Associations, entrepreneurs and officers of Central Government to review the implementation of the scheme on monthly basis and to ensure that bottlenecks, if any, faced by entrepreneurs are resolved in a time bound manner.
The participants were explained about the benefits of Ethanol Blended with Petrol Programme. It was informed that excess sugar of about 60 Lakh Tonne will be diverted to ethanol, helping sugar mills to timely payments of cane dues to farmers, additional utilisation of food-grains of about 135 Lakh Tonne will help in increasing the income of farmers, investment by entrepreneurs will help in creation of employment in rural areas, distributed ethanol production will help in reduction of transportation cost of ethanol and reduction in crude oil import will help India to become Atmanirbhar in petroleum sector.
It is expected that with the participation of entrepreneurs and states, ethanol production capacity in the country would increase from present 684 crore liters to the required level of 1500 crore liters by 2025 in order to achieve blending targets. There is enough availability of raw material like sugarcane, molasses, damaged food grain , FCI Rice, maize etc. Remunerative prices of ethanol from various feed-stocks including sugarcane juice, B-Heavy molasses, C-Heavy molasses, rice available with FCI, damaged food grains and maize have also been fixed. Prices of ethanol are fixed on the basis of prices of raw materials and not on the basis of prices of crude oil. OMCs being the assured buyer for ethanol has also given comfort for purchase of ethanol from distilleries for next 10 years. Tripartite Agreement between distilleries, banks and OMCs gives extra comfort to banks for lending. Some State Governments have also included ethanol projects under priority sector. As such the upcoming ethanol projects are viable.